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Aon plc – ‘10-Q’ for 3/31/00

On:  Friday, 5/12/00, at 4:51pm ET   ·   For:  3/31/00   ·   Accession #:  948572-0-33   ·   File #:  1-07933

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/12/00  Aon plc                           10-Q        3/31/00    3:56K                                    Swift John S Co Inc/FA

Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Aon Corporation                                       22     89K 
 2: EX-15       Unaudited Interim Financial Information                1      6K 
 3: EX-27       FDS -- 5                                               2±     8K

10-Q   —   Aon Corporation
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
20Item 4. Submission of Matters to A Vote of Security Holders
21Item 6. Exhibits and Reports on Form 8-K
22Item 601. Exhibit Table 
10-Q1st Page of 22TOC↑TopPreviousNext↓BottomJust 1st
 

      SECURITIES AND EXCHANGE COMMISSION
      WASHINGTON, D.C. 20549

       FORM 10-Q

X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  
---                                                     
      OF THE SECURITIES AND EXCHANGE ACT OF 1934

       FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

      OR

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
---                                                     
OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission file number 1-7933

 Aon Corporation
 ---------------
(Exact Name of Registrant as Specified in its Charter)

DELAWARE                                   36-3051915     
--------                                   ----------     
(State or Other Jurisdiction of                    (IRS Employer                
Incorporation or Organization)                     Identification No.)        

123 N. WACKER DR, CHICAGO, ILLINOIS                      60606                  
-----------------------------------                      -----                  
(Address of Principal Executive Offices)                (Zip Code)              

(312) 701-3000                                                
--------------                                                
(Registrant's Telephone Number)                                                 

Indicate  by check  mark  whether  the  Registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  and Exchange Act
of 1934  during the  preceding  3 months (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES  X  NO                            
                      ---    ---

Number of shares of common stock outstanding:                                   

                                                     No. Outstanding
             Class                                   as of 3-31-00
             -----                                   -------------

   $1.00 par value Common                            255,861,956


10-Q2nd Page of 22TOC1stPreviousNext↓BottomJust 2nd

Part 1
 Financial Information
 Aon CORPORATION
 Condensed Consolidated Statements of Financial Position

(millions)                                           As of           As of    
                                                   March 31, 2000  Dec. 31, 1999
                                                   -----------------------------
ASSETS                                             (UNAUDITED)                

Investments                                                                   

Fixed maturities at fair value                     $  2,509      $  2,497 

Equity securities at fair value                         555           574 

Short-term investments                                2,263         2,362 

Other investments                                       848           751 
                                                   -------------  --------------
   Total investments                                 6,175         6,184

Cash                                                      774           837   

Receivables                                                                   

Insurance brokerage and consulting                                        
    services                                         6,299         6,230

Premiums and other                                    1,201         1,116 
                                                   -------------  --------------
   Total receivables                                 7,500         7,346

Excess of cost over net assets purchased                3,335         3,359   

Other intangible assets                                   498           503   

Other assets                                            3,018         2,903   

                                                   -------------  --------------
   Total Assets                                   $ 21,300      $ 21,132
                                                   =============  ==============

(millions)                                            As of           As of   
                                                   March 31, 2000  Dec. 31, 1999
                                                   -----------------------------
Liabilities and Stockholders' Equity               (Unaudited)                

Insurance Premiums Payable                           $  7,837      $  7,643   

Policy Liabilities                                                            
Future policy benefits                                1,009         1,005 
Policy and contract claims                              760           764 
Unearned and advance premiums                         2,050         2,012 
Other policyholder funds                              1,142         1,207 
                                                    ------------  --------------
   Total policy liabilities                          4,961         4,988

General Liabilities                                                           
General expenses                                      1,573         1,731 
Short-term borrowings                                   343           303 
Notes payable                                         1,593         1,611 
Other liabilities                                     1,053           955 
                                                    ------------  --------------
   Total Liabilities                                17,360        17,231

Commitments and Contingent Liabilities                                        

Redeemable Preferred Stock                                 50            50   

Company-Obligated Mandatorily Redeemable                                      
Preferred Capital Securities of Subsidiary                                
Trust Holding Solely the Company's Junior                                 
Subordinated Debentures                                 800           800 

Stockholders' Equity                                                          
Common stock - $1 par value                             259           259 
Paid-in additional capital                              536           525 
Accumulated other comprehensive loss                   (338)         (309)
Retained earnings                                     2,966         2,905 
Less - Treasury stock at cost                          (106)          (90)
       Deferred compensation                           (227)         (239)
                                                    ------------  --------------
   Total Stockholders' Equity                        3,090         3,051
                                                    ------------  --------------
   Total Liabilities and Stockholders' Equity     $ 21,300      $ 21,132
                                                    ============  ==============

See the accompanying notes to the condensed consolidated financial statements.

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                                                        [Enlarge/Download Table]

                                       Aon Corporation                                                       
                         Condensed Consolidated Statements of Income                                         
                                         (Unaudited)                                                         

                                                                                First Quarter Ended          
                                                                      ---------------------------------------
(millions except per share data)                                             March 31,          March 31,    
                                                                               2000               1999       
                                                                      ------------------- -------------------

REVENUE                                                                                                      
                                                                                                             
   Brokerage commissions and fees ..................................             $ 1,205             $ 1,112 
   Premiums and other ..............................................                 468                 437 
   Investment income ...............................................                 137                 150 
                                                                                ---------           ---------
      TOTAL REVENUE ................................................               1,810               1,699 
                                                                                ---------           ---------

EXPENSES                                                                                                     
   General expenses ................................................               1,271               1,309 
   Benefits to policyholders .......................................                 252                 239 
   Interest expense ................................................                  31                  21 
   Amortization of intangible assets ...............................                  38                  34 
                                                                                ---------           ---------
      TOTAL EXPENSES ...............................................               1,592               1,603 
                                                                                ---------           ---------

INCOME BEFORE INCOME TAX AND MINORITY INTEREST                                       218                  96 
   Provision for income tax ........................................                  85                  36 
                                                                                ---------           ---------
INCOME BEFORE MINORITY INTEREST ....................................                 133                  60 
   Minority interest - 8.205% trust preferred capital securities ...                 (10)                (10)
                                                                                ---------           ---------
NET INCOME .........................................................             $   123             $    50 
                                                                                =========           =========
   Preferred stock dividends .......................................                  (1)                 (1)
                                                                                ---------           ---------
NET INCOME AVAILABLE FOR COMMON STOCKHOLDERS .......................             $   122             $    49 
                                                                                =========           =========

Net Income Per Share:                                                                                        
   Basic net income per share ......................................             $  0.47             $  0.19 
                                                                                =========           =========
   Dilutive net income per share ...................................             $  0.47             $  0.19 
                                                                                =========           =========

CASH DIVIDENDS PAID ON COMMON STOCK ................................             $  0.21             $  0.19 
                                                                                =========           =========

Dilutive average common and common equivalent shares outstanding ...               260.5               261.8 
                                                                                ---------           ---------

See the accompanying notes to the condensed consolidated financial statements.  

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                                                        [Enlarge/Download Table]

                                         Aon CORPORATION                                                  
                         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                  
                                           (Unaudited)                                                    

                                                                                     First Quarter Ended  
                                                                                    ----------------------
                                                                                     March 31,   March 31,
(millions)                                                                             2000        1999   
                                                                                    ----------   ---------
                                                                                                          
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                     
  Net income ......................................................................     $ 123       $  50 
  Adjustments to reconcile net income to cash provided by operating activities                            
     Insurance assets / liabilities net of reinsurance ............................        87          89 
     Amortization of intangible assets ............................................        38          34 
     Depreciation of property and equipment .......................................        44          44 
     Income taxes .................................................................        17         (20)
     Special charge and purchase accounting liabilities (notes 7 and 10) ..........       (43)        138 
     Brokerage insurance premiums payable - net ...................................       125         198 
     Other ........................................................................      (245)       (270)
                                                                                       -------     -------
CASH PROVIDED BY OPERATING ACTIVITIES .............................................       146         263 
                                                                                       -------     -------

CASH FLOWS FROM INVESTING ACTIVITIES:                                                                     
  Sale of investments                                                                                     
     Fixed maturities                                                                                     
        Maturities ................................................................        28          14 
        Calls and prepayments .....................................................        32          49 
        Sales .....................................................................        57         601 
     Equity securities ............................................................        25         176 
     Other investments ............................................................        57          22 
  Purchase of investments                                                                                 
     Fixed maturities .............................................................      (130)       (387)
     Equity securities ............................................................       (15)       (181)
     Other investments ............................................................      (128)        (44)
  Sale (purchase) of short-term investments - net .................................       100        (258)
  Acquisition of subsidiaries .....................................................       (35)       (102)
  Property and equipment and other ................................................       (59)        (41)
                                                                                       -------     -------
        CASH USED BY INVESTING ACTIVITIES .........................................       (68)       (151)
                                                                                       -------     -------

CASH FLOWS FROM FINANCING ACTIVITIES:                                                                     
   Treasury stock transactions - net ..............................................       (23)         (1)
   Issuance of short-term borrowings - net ........................................        41         125 
   Repayment of long-term debt ....................................................       (16)         (5)
   Interest sensitive, annuity and investment-type contracts                                              
     Deposits .....................................................................        34         103 
     Withdrawals ..................................................................      (123)        (81)
   Cash dividends to stockholders .................................................       (54)        (48)
                                                                                       -------     -------
        CASH PROVIDED (USED) BY FINANCING ACTIVITIES ..............................      (141)         93 
                                                                                       -------     -------

EFFECT OF EXCHANGE RATE CHANGES ON CASH ...........................................         -          (1)
INCREASE (DECREASE) IN CASH .......................................................       (63)        204 
CASH AT BEGINNING OF PERIOD .......................................................       837         723 
                                                                                       -------     -------
CASH AT END OF PERIOD .............................................................     $ 774       $ 927 
                                                                                       =======     =======


See the accompanying notes to condensed consolidated financial statements.    

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10-Q5th Page of 22TOC1stPreviousNext↓BottomJust 5th

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                        

1.    Statement of Accounting Principles                                        
----------------------------------                                  

      The  financial  results  included in this report are stated in  conformity
      with accounting principles generally accepted in the United States and are
      unaudited   but  include  all  normal  recurring  adjustments   which  the
      Registrant  ("Aon") considers  necessary  for a fair  presentation  of the
      results  for  such periods.  These  interim  figures  are  not necessarily
indicative of results for a full year as further discussed below.   

      Refer to the  consolidated  financial  statements  and notes in the Annual
      Report to Stockholders for the year ended December 31, 1999 for additional
      details  of Aon's  financial  position,  as well as a  description  of the
      accounting policies which have been continued without material change. The
      details  included  in the  notes  have not  changed  except as a result of
      normal  transactions  in the  interim  and  the  events  mentioned  in the
footnotes below.                                                    

      Certain  prior  period  amounts have been  reclassified  to conform to the
current period presentation.                                        

2.    Statements of Financial Accounting Standards (SFAS)                       
---------------------------------------------------                 

      In June 1998,  the  Financial  Accounting  Standards  Board (FASB)  issued
      Statement No. 133,  "Accounting  for  Derivative  Instruments  and Hedging
      Activities."  Statement  No.  133  establishes  accounting  and  reporting
      standards for derivative  instruments and for hedging  activities and will
      require Aon to recognize  all  derivatives  on the  statement of financial
      position at fair value.  Aon has not yet  determined  the effect,  if any,
this statement will have on the consolidated financial statements.  

      In June  1999,  the  FASB  issued  Statement  No.  137  that  amended  the
      required   adoption  date  of  Statement  No.  133  to  all  fiscal  years
      beginning  after June 15,  2000.  Early  adoption is  permitted  as of the
      beginning  of any quarter  subsequent  to the  issuance of  Statement  No.
137.  Aon has not yet decided when it will adopt Statement No. 133. 

      In December  1999, the  Securities  and Exchange  Commission  (SEC) issued
      Staff  Accounting  Bulletin  (SAB) No.  101 which  provides  guidance  for
      applying generally accepted  accounting  principles relating to the timing
      of revenue  recognition  in financial  statements  filed with the SEC. Any
      change  required by the SAB must be made by the end of second quarter 2000
      with a cumulative  effect accounting change effective January 1, 2000. Aon
      has not yet  determined  the  effect,  if any,  this SAB will  have on the
consolidated financial statements.                                  

3.    Comprehensive Income                                                      
--------------------                                                

      The components of comprehensive income (loss), net of related tax, for the
first quarter ended March 31, 2000 and 1999 are as follows:         

- 5 - 


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         (millions)                                    2000           1999
                                                       ----           ----

         Net income                                   $ 123          $  50
          Net unrealized investment gains (losses)         3            (63)
          Net foreign exchange losses                    (32)           (66)
                                                       --------       --------
          Comprehensive income (loss)                  $  94          $ (79)
                                                       ========       ========

      The components of  accumulated  other  comprehensive  loss, net of related
tax, at March 31, 2000 and December 31, 1999, are as follows:       

          (millions)                                     2000           1999
                                                         ----           ----

           Net unrealized investment losses             $ (118)        $ (121)
           Net foreign exchange losses                    (184)          (152)
           Net minimum pension liability adjustment        (36)           (36)
                                                        --------       ---------
           Accumulated other comprehensive loss         $ (338)        $ (309)
                                                        ========       =========

4.    Business Segments                                                         
-----------------                                                   

      Aon classifies its business into three major segments based on the type of
      service or  product,  and a fourth  nonoperating  segment.  The  Insurance
      Brokerage  and  Other   Services   segment  is  comprised  of  retail  and
      reinsurance  brokerage  operations  which include  specialty and wholesale
      activity.  The  Consulting  segment is Aon's  employee  benefit  and human
      resource consulting  organization.  The Insurance  Underwriting segment is
      comprised of life, accident and health, and extended warranty and casualty
      insurance  products.  The  Corporate and Other  segment  revenues  consist
      primarily of investment  income on capital and expenses consist  primarily
      of amortization  of  goodwill,  interest, certain  information  technology
expenses and other general and administrative expenses.             

      Amounts  reported in the tables for the four  segments,  when  aggregated,
      total to the amounts in the accompanying  condensed consolidated financial
      statements.  Revenues  are  attributed  to  geographic  areas based on the
      location of the resources  producing  the revenues.  There are no material
inter-segment amounts to be eliminated.                             

      Selected  information  about  Aon's  operating  and  geographic  areas  of
operation follows:                                                  

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      ==========================================================================
INSURANCE BROKERAGE AND OTHER SERVICES                              

    (millions)            First quarter ended March 31        2000      1999
      ==========================================================================
Revenue:                                                            
       United States                                       $   524   $   483
       United Kingdom                                          204       189
       Europe                                                  226       225
       Rest of World                                           120       100
      --------------------------------------------------------------------------
    Total revenue                                          $ 1,074   $   997
      --------------------------------------------------------------------------

Income before income tax                                            
       excluding special charges                           $   180   $   184
    Special charges                                              -       119
      --------------------------------------------------------------------------
    Income before income tax                               $   180   $    65
      --------------------------------------------------------------------------

      ==========================================================================
CONSULTING                                                          

    (millions)            First quarter ended March 31        2000      1999
      ==========================================================================
Revenue:                                                            
       United States                                       $    99   $    91
       United Kingdom                                           39        34
       Europe                                                   22        16
       Rest of World                                            16        15
      --------------------------------------------------------------------------
    Total revenue                                          $   176   $   156
      --------------------------------------------------------------------------

Income before income tax                                            
         excluding special charges                         $    19   $    17
    Special charges                                              -        44
      --------------------------------------------------------------------------
     Income (loss) before income tax                        $    19   $   (27)
      --------------------------------------------------------------------------

      ==========================================================================
INSURANCE UNDERWRITING                                              

    (millions)            First quarter ended March 31        2000      1999
      ==========================================================================
Revenue:                                                            
       United States                                       $   376   $   342
       United Kingdom                                           78        82
       Europe                                                   26        30
       Rest of World                                            50        43
      --------------------------------------------------------------------------
    Total revenue                                          $   530   $   497
      --------------------------------------------------------------------------
    Income before income tax                               $    67   $    64
      --------------------------------------------------------------------------

      --------------------------------------------------------------------------
Corporate and Other                                                 

    (millions)            First quarter ended March 31        2000      1999
      ==========================================================================
    Total revenue                                          $    30   $    49
      --------------------------------------------------------------------------
     Loss before income tax                                 $   (48)  $    (6)
      --------------------------------------------------------------------------

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5.    Capital Stock                                                             
-------------                                                       

      During first quarter  2000,  Aon reissued  373,700  shares of common stock
      from treasury for employee  benefit plans and 323,300 shares in connection
      with the employee stock purchase plan. Aon purchased 1.5 million shares of
      its common stock at a total cost of $38 million during first quarter 2000.
      There were 3.5  million  shares of common  stock held in treasury at March
31, 2000.                                                           

6.    Capital Securities                                                        
------------------                                                  

      In 1997, Aon Capital A, a subsidiary  trust of Aon, issued $800 million of
      8.205%  mandatorily   redeemable  preferred  capital  securities  (capital
      securities).  The sole asset of Aon  Capital A is $824  million  aggregate
      principal amount of Aon's 8.205% Junior  Subordinated  Deferrable Interest
Debentures due January 1, 2027.                                     

7.    Business Combinations                                                     
---------------------                                               

      In  first  quarter  1999,  Aon  consummated  a plan of  restructuring  its
      operations as a result of recent business combination  activity. A special
charge was recorded in the amount of $120 million.                  

      In  first  quarter  2000,  Aon  made  total  payments  of  $8  million  on
      restructuring  charges and  purchase  accounting  liabilities  relating to
business combinations.                                              

      The movements of these special charges and purchase accounting liabilities
are presented below.                                                

      The following table demonstrates the activity related to the liability for
   termination benefits and abandoned leases recorded as expenses in 1999:

                       Termination         Lease
     (millions)                         Benefits      Abandonments       Total
      --------------------------------------------------------------------------
     Expense charged in 1999              $ 67            $ 11            $ 78
      Cash payments in 1999                 (51)             (6)            (57)
      Credit to expense in 2000               -              (4)             (4)
      Cash payments in 2000                  (2)              -              (2)
      --------------------------------------------------------------------------
     Balance at March 31, 2000            $ 14            $  1            $ 15
      --------------------------------------------------------------------------

      The following table  demonstrates  the activity related to the liabilities
established as a result of 1998 acquisitions:                       

                      Termination        Lease
    (millions)                         Benefits     Abandonments       Total
      --------------------------------------------------------------------------
    Initial liability                    $ 40            $ 30           $ 70
     Cash payments in 1998                 (16)             (4)           (20)
     Cash payments in 1999                 (24)             (6)           (30)
     Cash payments in 2000                   -              (1)            (1)
      --------------------------------------------------------------------------
    Balance at March 31, 2000            $  -            $ 19           $ 19
      --------------------------------------------------------------------------

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      The  following  table  demonstrates  the activity  related to the Aon plan
liabilities recorded as expenses in 1996 and 1997:                  

                                                                [Download Table]

                                                      Lease                
                                                  Abandonments             
                                   Termination      and Other              
(millions)                          Benefits        Exit Costs       Total 
---------------------------------------------------------------------------
                                                                           
Balance at  December 31, 1996         $ 12            $ 48           $ 60  
Expense charged in 1997                 40              68            108  
Cash payments in 1997                  (48)            (10)           (58) 
Cash payments in 1998                   (4)            (26)           (30) 
Cash payments in 1999                    -             (24)           (24) 
Credit to expense in 1999                -             (11)           (11) 
Cash payments in 2000                    -              (2)            (2) 
---------------------------------------------------------------------------
Balance at March 31, 2000             $  -            $ 43           $ 43  
---------------------------------------------------------------------------

      The following table  demonstrates the activity related to the A&A and Bain
      Hogg  plan   liabilities   established  as  a  result  of  1996  and  1997
acquisitions:                                                       

                                                                [Download Table]

                                                      Lease                
                                                   Abandonments            
                                   Termination       and Other             
(millions)                           Benefits       Exit Costs       Total 
---------------------------------------------------------------------------
                                                                           
Initial liability                     $ 100            $ 164         $ 264 
Cash payments in 1997                   (65)             (44)         (109)
Cash payments in 1998                   (35)             (45)          (80)
Cash payments in 1999                     -              (28)          (28)
Charge to expense in 1999                 -               13            13 
Charge to expense in 2000                 -                4             4 
Cash payments in 2000                     -               (3)           (3)
---------------------------------------------------------------------------
Balance at March 31, 2000             $   -            $  61         $  61 
---------------------------------------------------------------------------

All  of  Aon's  liabilities  relating  to   restucturing  charges  and  purchase
accounting  are  reflected in the general expense  liabilities  in the condensed
consolidated statements of financial position.                                  

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8.    Income Per Share                                                          
----------------                                                    

Income per share is calculated as follows:                          

                                                 First Quarter Ended March 31,
                                                --------------------------------
      (millions except per share data)             2000           1999
           ---------------------------------------------------------------------
       Net income                                 $  123          $   50
       Redeemable preferred stock dividends            1               1
                                                   -----------------------------
       Net income  for dilutive and basic         $  122          $   49
                                                   =============================

       Basic shares outstanding                      259             258
       Common stock equivalents                        1               4
                                                   -----------------------------
       Dilutive potential common shares              260             262
           ---------------------------------------------------------------------
       Basic net income per share                 $ 0.47          $ 0.19
       Dilutive net income per share              $ 0.47          $ 0.19
           ---------------------------------------------------------------------

9.    Alexander & Alexander Services Inc. (A&A) Discontinued Operations         
-----------------------------------------------------------------   

      A&A  discontinued  its  property  and  casualty   insurance   underwriting
      operations in 1985, some of which were then placed into run-off,  with the
      remainder  sold in 1987.  In  connection  with those  sales,  A&A provided
      indemnities  to  the  purchasers  for  various   estimated  and  potential
      liabilities,  including  provisions to cover future losses attributable to
      insurance pooling  arrangements,  a stop-loss reinsurance  agreement,  and
      actions or omissions by various  underwriting  agencies previously managed
      by an A&A  subsidiary.  As of March 31, 2000, the  liabilities  associated
      with the foregoing  indemnities and liabilities of insurance  underwriting
      subsidiaries  that  are  currently  in  run-off  were  included  in  other
      liabilities  in  the  accompanying  condensed  consolidated  statement  of
      financial position. Such liabilities amounted to $146 million and would be
      substantially reduced if a February,  2000 ruling from the Court of Appeal
      in England  favorable to the Company,  in respect of which right to appeal
      has been  granted,  were upheld in a decision  expected in or around 2002.
      The stated liabilities are net of $177 million of reinsurance recoverables
and other assets.                                                   

10.   Contingencies                                                             
-------------                                                       

      Aon and its subsidiaries  are subject to numerous claims,  tax assessments
      and lawsuits  that arise in the ordinary  course of business.  The damages
      that may be claimed are  substantial,  including in many instances  claims
      for punitive or extraordinary damages.  Accruals for these items have been
     provided to the extent that losses are deemed probable and are estimable.

      In 1998, the Internal  Revenue  Service (IRS) proposed  adjustments to the
      tax of certain Aon  subsidiaries for the period of 1990 through 1993. Most
      of these adjustments should be resolved through factual  substantiation of
      certain  accounting   matters.   However,   the  IRS  has  contended  that
      retro-rated  extended warranty  contracts do not constitute  insurance for
      tax purposes.  Accordingly,  the IRS has proposed a deferral of deductions
for obligations  under those contracts.  The effect of              

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      such deferral would be to increase the current tax  obligations of certain
      Aon subsidiaries by approximately $74 million,  $3 million, $5 million and
      $12  million  (plus  interest)  in  years  1990,  1991,  1992,  and  1993,
      respectively.  Aon believes  that the IRS's  position is without merit and
      inconsistent  with numerous  previous IRS private letter rulings.  Aon has
      commenced an administrative  appeal and intends to contest vigorously such
      treatment.  Aon  believes  that  if the  contracts  are  deemed  not to be
      insurance for tax purposes,  they would be  recharacterized  in such a way
      that the increased  taxes for the years in question would be far less than
the proposed assessments.                                           

      In the second  quarter of 1999,  Allianz Life  Insurance  Company of North
      America, Inc. ("Allianz") filed an amended complaint in Minnesota adding a
      brokerage  subsidiary  of Aon as a defendant  in an action  which  Allianz
      brought against three insurance carriers reinsured by Allianz. These three
      carriers provided certain types of workers' compensation  reinsurance to a
      pool of insurers and to certain  facilities  managed by Unicover Managers,
      Inc.  ("Unicover"),  a New Jersey  corporation  not  affiliated  with Aon.
      Allianz  alleges  that the Aon  subsidiary  acted as an agent of the three
      carriers when placing reinsurance coverage on their behalf. Allianz claims
      that the  reinsurance  it issued  should be rescinded or that it should be
      awarded  damages,  based on alleged  fraudulent,  negligent  and  innocent
      misrepresentations  by the carriers,  through their agents,  including the
      Aon  subsidiary  defendant.  Aon  believes  that  the Aon  subsidiary  has
      meritorious  defenses and the Aon subsidiary  intends to vigorously defend
this claim.                                                         

      Except for an action  filed in  Illinois  seeking to compel Aon to produce
      documents  and for an action  filed in England  disputing  entitlement  to
      commissions  and  fees to both of which  Aon is  responding,  the  Allianz
      lawsuit is the only lawsuit or  arbitration  relating to Unicover in which
      any Aon related  entity is a party.  However,  in fourth  quarter 1999 Aon
      recognized  a pretax  charge for $72  million in general  expenses  in its
      insurance  brokerage  and  other  services  segment  relating  to  various
      litigation matters including  Unicover.  As of March 31, 2000, Aon has $49
      million  remaining in general  expense  liabilities  for these  litigation
      matters including Unicover. The remaining Unicover issues are complex and,
  therefore, the timing of resolution cannot be determined at this time.

      Certain U.K.  subsidiaries  of Aon have been required by their  regulatory
      body, the Personal  Investment  Authority (PIA), to review advice given by
      those  subsidiaries  to  individuals  who bought  pension plans during the
      period  from April 1988 to June 1994.  These  reviews  have  resulted in a
      requirement to pay  compensation to clients based on  guidelines issued by
      the PIA.  In 1999, Aon charged  general  expenses for $121 million in  the
      consulting segment, of which  $43  million was in first  quarter  1999, to
      provide  for  these  payments.  As of March 31, 2000,  Aon has $96 million
      remaining in  general  expense  liabilities  for these payments  which are
      expected  to  be disbursed  over  the next several years.  Aon's  ultimate
      exposure from the private  pension plan review,  as  presently calculated,
      is subject to a number of variable factors including, among others, equity
      markets, the rate of response to the pension review mailings, the interest
      rate established  quarterly by the PIA for  calculating  compensation, and
      the precise  scope,  duration  and  methodology of the  review,  including
      whether  recent regulatory  guidance will have to be applied to previously
settled claims.                                                     

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      Although the ultimate  outcome of all matters  referred to above cannot be
      ascertained and liabilities in indeterminate amounts may be imposed on Aon
      or its subsidiaries, on the basis of present information,  availability of
      insurance  coverages  and legal  advice  received,  it is the  opinion  of
      management that the disposition or ultimate  determination  of such claims
      will not have a  material  adverse  effect on the  consolidated  financial
      position of Aon beyond  amounts  provided.  However,  it is possible  that
      future results of operations or cash flows for any particular quarterly or
      annual period could be materially affected by an unfavorable resolution of
these matters.                                                      

11.   Subsequent Events                                                         
-----------------                                                   

      In April 2000,  Aon's  stockholders  approved an amendment to Aon's Second
      Certificate  of  Incorporation  to increase the number of shares of common
stock Aon is authorized to issue from 300 million to 750 million.   

      In May 2000,  Aon  filed a  prospectus to use the remaining  $250  million
      of its universal shelf  registration filed in  May 1999.  The net proceeds
      from the sale  will be used to  reduce outstanding  short-term  commercial
paper borrowings.                                                   

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 Aon CORPORATION
MANAGEMENT'S ANALYSIS OF OPERATING RESULTS
 AND FINANCIAL CONDITION

REVENUE AND INCOME BEFORE INCOME TAX
FOR FIRST QUARTER 2000

CONSOLIDATED RESULTS                                                            
--------------------                                                            

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS                               
-------------------------------------------------                               

This quarterly  report contains certain  statements  relating to future results,
which are  forward-looking  statements  as that term is defined  in the  Private
Securities Litigation Reform Act of 1995. These  forward-looking  statements are
subject to certain risks and  uncertainties  that could cause actual  results to
differ materially from historical results or those  anticipated,  depending on a
variety of factors such as general  economic  conditions in different  countries
around the  world,  fluctuations  in global  equity  and fixed  income  markets,
downward  commercial  property and casualty premium  pressures,  the competitive
environment and the actual cost of resolution of contingent liabilities.        

GENERAL                                                                         
-------                                                                         

Brokerage  commissions  and fees  increased  $93 million or 8% in first  quarter
2000, primarily reflecting growth from business combination  activity,  internal
growth, increased new business and the impact of slower premium rate declines on
revenue.                                                                        

Premiums and other is primarily  related to insurance  underwriting  operations.
Premiums and other  increased $31 million or 7% in first quarter 2000,  compared
with the  same  period  last  year.  Total  premiums  earned  in  the  insurance
underwriting  segment were $463  million, an increase of $36 million or 8%  over
prior year. The increase in  premiums  earned  primarily  reflects  new business
development in the domestic  mechanical warranty and  casualty  lines, continued
internal growth and the impact of acquisitions.                                 

Investment  income,  which  includes  related  expenses and income on disposals,
decreased  9% in the first  quarter  2000 when  compared  to prior  year.  First
quarter 1999 investment  income included a gain on the sales of tax-exempt bonds
of approximately  $30 million with no comparable  amount in 2000.  Excluding the
gain on the bonds,  first quarter  2000  investment  income increased 14% or $17
million primarily  reflecting  increased  valuations from equity  investments in
limited  partnerships in the quarter.   Revenues from private equity investments
fluctuate  due  to  the inherent  volatility of equity  investments.  Investment
income from insurance  brokerage and other services,  and consulting operations,
primarily  relating to fiduciary  funds,  increased  $4 million in first quarter
2000 compared to first quarter 1999.                                            

Total revenue  increased  $111 million or 7% in first  quarter  2000,  primarily
attributable to growth in brokerage commissions and fees resulting from business
combination  activity,  the  impact  of slower  premium  rate  declines,  growth
resulting  from new  business  and  internal  growth in  the operating segments.
Revenue  growth was slowed by the impact of foreign exchange rate reductions and
the absence of Unicover revenues in first quarter 2000.                         

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In first quarter 1999, Aon recorded in general expenses, special charges of $163
million  ($102 million after-tax or $0.39 per share)  including  provisions  for
pension selling,  early  retirement plan in the U.S. and Canada and the consoli-
dation  of Aon's European insurance brokerage  and  other  services  operations.
General expenses,  excluding 1999 special charges, increased $125 million or 11%
in the quarter primarily reflecting  investments in new business initiatives and
technology.  A $13 million or 5% increase  in  benefits  to  policyholders  when
compared to prior year was fairly  consistent  with  growth in related  premiums
earned and reflected no unusual claims  activity.  Total expenses  decreased $11
million or 1% in first quarter 2000 when compared to prior year. Total expenses,
excluding  the 1999 special charges, increased 11% for the quarter when compared
to 1999.  Interest expense increased  $10 million or 48%  compared to prior year
attributed primarily to acquisition financing in 1999. Restructuring liabilities
for recent  acquisitions and 1999 special charges have been reduced by  payments
as planned.                                                                     

References to income  before  income tax in the  following  paragraph are before
minority  interest  related to the  issuance  of 8.205%  mandatorily  redeemable
preferred capital securities (capital securities).                              

Income before  income tax  increased  $122 million or 127% in first quarter 2000
when  compared to prior year,  primarily  due to the  inclusion  of 1999 special
charges.  Excluding  special  charges,  income  before  income tax decreased $41
million or 16% in first  quarter  2000 when  compared to prior  year,  primarily
reflecting  costs  to  integrate  Aon's  global  network,  increased  technology
expenses related to brokerage computer systems,  additional interest expense and
the inclusion of the $30 million gain on sale of tax exempt securities in 1999. 

BUSINESS SEGMENTS                                                               
-----------------                                                               

GENERAL                                                                         
-------                                                                         

For purposes of the following business segments discussions, comparisons against
1999 results exclude  discontinued  operations and special charges. In addition,
references to income before income tax exclude minority  interest related to the
capital securities.                                                             

Aon classifies its businesses  into three major  operating  segments:  Insurance
Brokerage and Other Services,  Consulting and Insurance  Underwriting;  and into
one nonoperating segment, Corporate and Other. A description of operations and a
review of financial performance for each of the four business segments follow.  

INSURANCE BROKERAGE AND OTHER SERVICES                                          
--------------------------------------                                          

The Insurance Brokerage and Other Services segment consists principally of Aon's
retail  and  reinsurance  brokerage  operations,  which  include  specialty  and
wholesale activity.                                                             

First  quarter 2000  Insurance  Brokerage  and Other  Services  revenue was $1.1
billion,  up 8%. Post-first quarter 1999 acquisitions as well as internal growth
accounted  for the  majority of this  revenue  growth.  Excluding  the impact of
acquisitions and foreign exchange,  revenue related to brokerage core businesses
grew approximately 5% in a very competitive environment.                        

U.S.  revenue of $524 million in 2000 was up 8% from 1999 due to  increased  new
business,  acquisitions,  the impact of diminishing  premium  rate  declines and
growth in U.S. specialty  operations.  U.K. and European revenue of $430 million
increased 4%  from 1999, primarily due to internal growth and acquisitions.  The
impact of foreign exchange rates partially offset this revenue growth.   Rest of
world revenue increased in                                                      

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2000  primarily  due  to  new initiatives. In the international retail brokerage
operations, price comparisons continue to be negative but have improved slightly
from fourth quarter 1999.                                                       

Retail brokerage results continued to reflect competitive  property and casualty
pricing.  Pretax income,  excluding 1999 special charges,  declined 2% over 1999
reflecting  lower revenue  sharing income with insurers that was principally due
to  higher  underwriting  losses.  While  this  negatively  affected  short-term
results, poor underwriting  performance  contributed to continued price firming.
Investments in new initiatives, with little or no immediate revenue growth, also
impacted revenue and pretax income results.  Pretax margins in this segment were
16.8% in the quarter  compared to 18.4% in 1999. The decline in revenue  sharing
income from  insurers  mentioned  above  accounted for  approximately  100 basis
points of the margin decline.  In addition,  higher  technology costs related to
the rollout of Aon's retail brokerage computer system platform and the impact of
certain  acquisitions  that have seasonally higher expenses relative to revenues
contributed  to the pretax  income and related  margin  decline in first quarter
2000.                                                                           

CONSULTING                                                                      
----------                                                                      

The  consulting  segment  provides  a range  of  consulting  services  including
employee benefits, human resources, compensation and change management.         

In the  consulting  segment,  first  quarter 2000 revenue  increased 13% to $176
million.  Internal  growth,  transfers of business units to consulting  from the
insurance  brokerage  and  other  services  segment  and   acquisition  activity
subsequent to the first quarter 1999  influenced  revenue  growth.  Absent these
factors,  revenue grew approximately 10% in first quarter 2000.                 

U.S.  revenue  of $99  million  in 2000 was up 9% from  1999  reflecting  growth
primarily in employee  benefit  consulting.  U.K.  and  European  revenue of $61
million  increased  22% from 1999.  U.K.  revenue grew 15% from the prior period
reflecting  strong  growth  in  employee  benefit  services.   European  revenue
increased 38%  reflecting revenue growth of existing  businesses  and  transfers
of certain operating  activities to the consulting segment,  partially offset by
unfavorable foreign exchange rates.                                             

Pretax income, excluding 1999 special charges, increased 12% to $19 million from
$17 million in first  quarter 1999  primarily  reflecting  U.K.  operations  and
domestic employee  benefits,  human resources and change management  consulting.
Pretax margins in this segment  were relatively flat in the quarter  compared to
1999.                                                                           

INSURANCE UNDERWRITING                                                          
----------------------                                                          

The  Insurance  Underwriting  segment is comprised of accident,  health and life
insurance and extended warranty and casualty insurance products.                

Revenue was $530 million in first quarter  2000, up 7% from 1999,  primarily due
to  growth in the U.S.  mechanical  extended  warranty  and  casualty  products.
Accident and health continued to expand product  distribution  through  worksite
marketing programs,  the development of new product  initiatives  introduced  in
1999 on a global basis, and acquisitions.  However,  the above revenue growth is
predominantly  from core  operations  and acquisitions as these new  initiatives
continue to build momentum.                                                     

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U.S.  revenue of $376 million was up 10% in first  quarter 2000 due to growth in
revenues for  accident and health and  mechanical  extended  warranty  products.
United Kingdom and European  revenue of $104 million  declined 7% reflecting the
transfer of  certain  business to the brokerage and  other  services  segment in
first  quarter 2000.  Rest of world  revenue was  $50 million, up 16% from prior
year reflecting continued geographic expansion.                                 

Pretax income was $67 million in first quarter 2000, up 5% from $64 million last
year reflecting  revenue growth mentioned above and overall expense  management.
Partially  offsetting  income growth were start-up costs related to new accident
and health product initiatives and investments in new product development in the
extended warranty lines.  Overall,  benefit and expense margins in first quarter
2000 did not suggest any significant shift in operating trends.                 

CORPORATE AND OTHER                                                             
-------------------                                                             

Revenue in this  category  consists  primarily of investment  income  (including
income on disposals) which is not otherwise allocated to the operating segments.
Corporate  operating  expenses include  administrative  and certain  information
technology costs.                                                               

Corporate and Other revenue for the first quarter 2000 was $30 million, down $19
million from first quarter 1999. In 1999, corporate revenue included $30 million
of gains from the disposal of $500  million in tax-exempt  bonds.  Excluding the
gain,  corporate and other revenue  increased $11 million or 58% over prior year
due to increased  valuation  from equity  investments  in limited  partnerships.
These investments  generate a more variable income stream due  to  the  inherent
volatility of equity security valuations.                                       

Corporate  and Other  expenses for the quarter were $78 million,  up $23 million
from the same period last year. They are composed of interest expense,  goodwill
amortization  and general  expenses.  Interest expense and goodwill amortization
were up a total  of  $13 million over the  first  quarter 1999,  reflecting  the
financing of acquisitions made during the last twelve months.                   

The revenue and expense discussed above contributed to the overall corporate and
other  pretax  loss of  $48 million in the quarter,  a $42 million  decline over
last year.                                                                      

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 NET INCOME FOR FIRST QUARTER 2000

First  quarter  2000 net  income was $123  million  ($0.47  dilutive  per share)
compared to $50 million ($0.19  dilutive per share) in 1999.  First quarter 1999
net income was primarily  influenced by after-tax  1999 special  charges of $102
million ($0.39 per share) with no comparable amount in first quarter 2000. Basic
net income per share,  including  1999 special  charges,  was $0.47 and $0.19 in
first quarter 2000 and 1999, respectively. Dividends on the redeemable preferred
stock  have been  deducted  from net income to  compute  income  per share.  The
effective  tax  rate  was 39%  and  37.5%  for  first  quarter  2000  and  1999,
respectively. The increase in the effective rate was primarily attributable to a
shift in business mix and to less tax-exempt income.                            

CASH FLOW AND FINANCIAL POSITION
AT THE END OF FIRST QUARTER 2000

Cash flows  provided by  operating  activities  in first  quarter 2000 were $146
million,  a decrease of $117  million  from first  quarter  1999.  The  decrease
primarily represents  lower  net income  before  special charges.  In  addition,
income taxes improved operating cashflow reflecting a refund due on  prior  year
taxes.  Special  charge  and  purchase  accounting  liabilities  show  the  most
significant  change  between years.  The  first  quarter  1999  income statement
reflected after-tax special charges of $102 million. First quarter 2000 reflects
only  actual  payments on special  charge and  purchase  accounting  liabilities
previously established.                                                         

Investing  activities  used cash of $68 million,  which was made  available from
financing and  operating  activities.  Cash of $100 million was provided  during
first  quarter  2000  from the sale of  short-term  investments.  Cash  used for
acquisition  activity  during  first  quarter  2000 was $35  million,  primarily
reflecting brokerage acquisitions.                                              

Cash  totaling  $141 million was used during first  quarter 2000 from  financing
activities.  The decrease of $234  million from first  quarter 1999 is primarily
due to net withdrawals of capital  accumulation  products and a reduction of new
short-term  borrowings.  Cash was used to pay dividends of $53 million on common
stock and $1 million on redeemable preferred stock during first quarter 2000.   

Aon's operating subsidiaries anticipate that there will be adequate liquidity to
meet their needs in the foreseeable future.  Aon's liquidity needs are primarily
for  servicing  its debt and for the payment of  dividends  on stock  issues and
capital securities.  The businesses of Aon's operating  subsidiaries continue to
provide  substantial  positive  cash  flow.  Brokerage  cash  flow has been used
primarily for acquisition financing and payments of special charge and  purchase
accounting liabilities. Aon anticipates  continuation of the company's  positive
cash flow, the ability of the parent company to access adequate short-term lines
of credit, and sufficient cash flow in the long term.                           

Due to the contractual nature of its insurance policyholder  liabilities,  which
are primarily intermediate to long-term in nature, Aon has invested primarily in
fixed  maturities.  With a carrying  value of $2.5  billion,  Aon's  total fixed
maturity  portfolio is invested primarily in investment grade holdings (97%) and
has a fair value which is 96.5% of amortized cost at March 31, 2000.            

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Total  assets  increased  $168 million to $21.3  billion  since  year-end  1999.
Invested  assets at March 31, 2000  decreased  $9 million from  year-end  levels
primarily  from  the  use of  short-term  investments  to  fund  special  charge
payments and to settle policyholder fund  liabilities.  The  amortized  cost and
fair value of less than investment grade fixed maturity investments at March 31,
2000  were $123  million and  $116 million, respectively.  The carrying value of
non-income  producing  investments in Aon's  portfolio at March 31, 2000 was $43
million, or 0.7% of total invested assets.                                      

In general,  Aon uses  derivative  financial  instruments  (primarily  financial
futures, swaps, options and  foreign  exchange forwards)  to:  (a)  hedge income
statement foreign currency translation and transaction  risks and other business
risks  (i.e.  interest rate and  credit  risk);   (b)  hedge  asset  price  risk
associated  with  financial instruments  whose change in value is reported under
SFAS 115; and (c) manage its overall asset/liability duration match. As of March
31,  2000,  Aon  had  open contracts, related to certain of the above, which had
net unrealized gains of approximately $3 million.                               

Short-term  borrowings increased at the end of first quarter 2000 by $40 million
when compared to year-end  1999.  The increase is primarily due to the financing
of acquisitions  which were mainly the  completion of minority interest  buyouts
associated with previous  acquisitions.  Notes  payable  decreased at the end of
first  quarter 2000  by $18 million when compared  to year-end 1999,  reflecting
debt repayments.  Included in notes payable at March 31, 2000  is  approximately
$7 million,  which  represents the principal  amount of notes to be paid  within
one year.                                                                       

Stockholders'  equity  increased $39 million in first quarter 2000 to $12.08 per
share, an increase of $0.17 per share since year-end 1999. The principal  factor
influencing  this increase was net income.  Partially  offsetting  this increase
were net foreign exchange losses of $32 million and dividends to stockholders of
$54 million.  Unrealized  investment gains and losses and foreign exchange gains
and  losses  fluctuations  from  period to period  are  largely  based on market
conditions. These short-term non-cash fluctuations are not economical  to  hedge
completely.                                                                     

REVIEW BY INDEPENDENT AUDITORS                                                  
------------------------------                                                  

The condensed  consolidated  financial statements at March 31, 2000, and for the
first quarter then ended have been reviewed,  prior to filing,  by Ernst & Young
LLP, Aon's independent auditors, and their report is included herein.           

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INDEPENDENT ACCOUNTANTS' REVIEW REPORT                                          

Board of Directors and Stockholders                                             
Aon Corporation                                                                 

We have reviewed the accompanying  condensed consolidated statement of financial
position of Aon  Corporation  as of March 31,  2000,  and the related  condensed
consolidated  statements  of income and cash flows for the  three-month  periods
ended March 31, 2000 and 1999. These financial statements are the responsibility
of the Company's management.                                                    

We  conducted  our  reviews in  accordance  with  standards  established  by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data, and making  inquiries of persons  responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance  with auditing  standards  generally  accepted in the United  States,
which will be performed  for the full year with the  objective of  expressing an
opinion regarding the financial statements taken as a whole. Accordingly,  we do
not express such an opinion.                                                    

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above  for them to be in  conformity  with  accounting  principles  generally
accepted in the United States.                                                  

We have  previously  audited,  in accordance with auditing  standards  generally
accepted in the United States, the consolidated  statement of financial position
of Aon  Corporation  as of  December  31,  1999,  and the  related  consolidated
statements  of income,  stockholders'  equity,  and cash flows for the year then
ended,  not  presented  herein,  and in our report  dated  February 8, 2000,  we
expressed an unqualified opinion on those consolidated financial statements.  In
our  opinion,   the  information  set  forth  in  the   accompanying   condensed
consolidated  statement of financial position as of December 31, 1999, is fairly
stated, in all material respects,  in relation to the consolidated  statement of
financial position from which it has been derived.                              

                                 ERNST & YOUNG LLP

Chicago, Illinois                                                               
May 10, 2000                                                                    

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 PART II

 OTHER INFORMATION

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 

      (a)   The Annual  Meeting of  Stockholders  of the  Registrant was held on
April 18, 2000 (the "1999 Annual Meeting").             

(b)   Not applicable.                                               

      (c)(i)Set forth below is the  tabulation  of the votes on each nominee for
election as a director:                                 

         Name                           For                    Against
         ----                           ---                    -------

         Daniel T. Carroll           226,625,652             2,159,607
         Franklin A. Cole            226,722,222             2,063,037
         Edgar D. Jannotta           226,719,710             2,065,549
         Lester B. Knight            226,794,226             1,991,033
         Perry J. Lewis              226,771,652             2,013,607
         Andrew J. McKenna           226,767,875             2,017,384
         Newton N. Minow             225,133,590             3,651,669
         Richard C. Notebaert        226,790,179             1,995,080
         Michael D. O'Halleran       225,534,731             3,250,528
         Donald  S. Perkins          226,715,102             2,070,157
         John W. Rogers, Jr.         226,808,718             1,976,541
         Patrick G. Ryan             226,767,511             2,017,748
         George A. Schaefer          226,757,677             2,027,582
         Raymond I. Skilling         226,768,433             2,016,826
         Fred L. Turner              226,781,180             2,004,079
         Arnold R. Weber             226,698,838             2,086,421
         Carolyn Y. Woo              226,765,677             2,019,582

              (ii)   Set  forth  below  is the  tabulation  of the  vote  on the
                     resolution  to  amend  the   Registrant's   Certificate  of
                     Incorporation  to  increase  the number of shares of common
                     stock  the   Registrant   is   authorized   to  issue  from
300,000,000 to 750,000,000.           

                     For                 Against           Abstain
                     ---                 -------           -------
                 193,111,589            34,720,311           953,359

              (iii)  Set  forth  below  is the  tabulation  of the  vote  on the
                     adoption of the amendment and  restatement of the Aon Stock
                     Award Plan and to re-approve such plan in its entirety with
                     a limit on the number of shares to be granted  annually  to
                     any one person in order to qualify such plan for  treatment
            under Section 162(m) of the Internal Revenue Code.

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                     For                 Against           Abstain
                     ---                 -------           -------
                 220,057,553              7,400,838        1,326,863

              (iv)   Set  forth  below  is the  tabulation  of the  vote  on the
                     selection  of  Ernst  &  Young  LLP  as  auditors  for  the
Registrant for the 2000 fiscal year.  

                     For                 Against           Abstain
                     ---                 -------           -------
                 227,504,330                470,338          810,591

(d)    Not applicable.                              

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K                                  

       (a)    Exhibits - The  exhibits  filed with this report are listed on the
--------                                            
attached Exhibit Index.                             

       (b)    Reports  on Form 8-K - No  Current  Reports on Form 8-K were filed
--------------------                                
for the quarter ended March 31, 2000.               

SIGNATURE                                                                       

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.                                          

                         Aon Corporation
                         ---------------
                      (Registrant)

May 12, 2000                                 /s/ Harvey N. Medvin               
                                          --------------------------------
                          HARVEY N. MEDVIN
                                      EXECUTIVE VICE PRESIDENT AND
                                 CHIEF FINANCIAL OFFICER
                                             (Principal Financial and Accounting
                  Officer)

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10-QLast Page of 22TOC1stPreviousNext↓BottomJust 22nd

Aon CORPORATION                                                                 
---------------                                                                 

Exhibit Number                                                                  
In Regulation S-K                                                               

Item 601 Exhibit Table                                                          
----------------------                                                          

(12) Statements regarding Computation of Ratios.                                

       (a)    Statement  regarding  Computation  of Ratio of  Earnings  to Fixed
              Charges   incorporated  by  reference  to  Exhibit  12(a)  to  the
        Registrant's  current  report on Form 8-K dated May 9, 2000.

       (b)    Statement  regarding  Computation of Ratio of Earnings to Combined
              Fixed  Charges  and  Preferred  Stock  Dividends  incorporated  by
              reference  to Exhibit 12(b) to the Registrant's current  report on
Form 8-K dated May 9, 2000.                         

(15) Letter re: Unaudited Interim Financial Information                         

(27) Financial Data Schedule                                                    

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Dates Referenced Herein   and   Documents Incorporated by Reference

Referenced-On Page
This ‘10-Q’ Filing    Date First  Last      Other Filings
1/1/278
6/15/00511-K
Filed on:5/12/0021
5/10/0019
5/9/00228-K
4/18/0020DEF 14A,  PRE 14A
For Period End:3/31/0012113F-HR,  13F-HR/A
2/8/0019SC 13G
1/1/005
12/31/9921910-K,  11-K,  11-K/A,  13F-HR
3/31/9951910-Q,  13F-HR
12/31/96910-K
 List all Filings 
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